- Toncoin appeared to have a bearish market structure on the daily time frame
- The 50% retracement level has been strongly defended and the rising OBV gave a buy signal
Toncoin (TON) bulls have defended the $5.19 support level over the past month. This level marked the 50% recovery of TON’s rally in February and March 2024. It saw a 58.4% rally in November when Bitcoin (BTC) rose from $70,000 to $99,000.
And yet this strength was insufficient to force a breakout outside the long-term range. As the price trades near its low range, investors would wonder if there are any bullish signs, or if they should sell the TON and look elsewhere for opportunities.
Toncoin – Accumulation or Distribution?
Source: TON/USDT on TradingView
Examining the weekly price, AMBCrypto spotted a range formation (purple) from $4.91 to $6.88. The mid-range level aligns with the 38.2% retracement level at $5.92, marking intermediate resistance.
In December, after BTC bulls were exhausted and unable to push beyond $108,000, TON’s price faced rejection of this 6-month high range. The failure to break out was disappointing. But the defense of the lows meant a buying opportunity.
Source: TON/USDT on TradingView
The daily chart showed that the market structure was bearish. Over the past six weeks, TON has made a series of lower highs. Meanwhile, its daily RSI was below neutral 50 – a sign of predominantly bearish momentum.
Investors with conviction in the asset can look to buy more TON at the $5.19 and $4.88 levels. A recovery would likely begin as OBV has risen steadily since September. This meant that an accumulation was taking place within the six-month interval.
Source: Coinlyse
The lower timeframes revealed that bullish sentiment has crept back into the market. Open interest rose from $147 million on Monday, January 13th to $156.48 million at press time.
The decline on Monday triggered a number of long liquidations. The rapid recovery of BTC and Toncoin indicated strength in the market. Therefore, the long-term bias remained bullish. In the coming days, volatility would be likely, but the $5.19 level is likely to remain unchanged.
Disclaimer: The information presented does not constitute financial, investment, trading or other types of advice and is solely the opinion of the author
